Actually it’s buying. Some time back, these folks with money as their weapon of choice invested in flooring distributors. Rubin Brothers and Hoboken come to mind; those two investments ended in bankruptcy and the distributors vanished.

Now we have smaller investment firms investing in the retail side of our business. This is really remarkable; retail is not the darling of the investment industry and certainly not in retail of a mature, slow growth industry like flooring. But they are here and they are making a difference.

One of the first efforts to invest in flooring retailers was with ifloor. ifloor was a pure Internet player but with the cash infusion they decided to also become a brick and mortar retailer. In short order, they opened up 35 small stores always as part of their distribution points; the downturn started in earnest and this low margin operator collapsed. (One of the large creditors/suppliers bought the name and some of their technology and are running a pure Internet seller again.) The next four seem to be on sounder footing.

Empire Today (Empire Carpet) started off as a family run business in Chicago. Seymour Cohen started the company in 1959 and added carpet to it in 1965. Carpet quickly became the key product. They were and are known for their promise of “Empire today, carpet tomorrow," their mind-numbing jingle and the fact that they don’t have retail stores. This is a sell direct company.

The company was sold to an investment firm in 2002. Initially Empire was marketed to immigrants and lower income families in Chicago. It was a credit company that installed carpet. But with new leadership and serious money they decided to expand their product offerings beyond carpet and their geographic territory. And for four furious years (2002 – 2006) its growth was beyond comparison. At its height in 2006, they were in 75 markets and selling carpet, vinyl, wood, laminate, ceramic tile, siding and window treatments. They were closing in on $750 million in sales and then the bottom fell out. They closed about one third of their operations and reduced their product offerings. But the industry is coming back and Empire is rising with the tide. Empire Today: An outside investment in retail flooring that is paying off again for the investors.

The last three are all niche retailers in hard surface only: Lumber Liquidators, Floor and Décor and the Tile Shop. Each has received a transfusion of capital from investment companies who now have part of the action. Two of the companies (Lumber Liquidators and The Tile Shop) are now publicly traded corporations.

Almost $1.5 billion of hard surface sales are generated by these three companies. Their spectacular growth has happened in the worst of times. It is all due to narrowcasting (offering a very narrow product mix but deep assortment of same) and those with deep pockets outside of our industry.

What’s the moral to the story? If an earnest young man with a bow tie, no socks and a scraggly two day old beard that he thinks is way cool and says he’s from an investment company you have never heard of and says things like "EBITDA" as if it were a word and not a acronym, don’t close the door.